Foreclosures are Soaring in April and May

Two months from now, the foreclosure crisis will be top of the news once again catching everyone off guard because of the past six months ‘intervention’. Thanks Washington.

The chart below highlights the top servicers in the nation and their monthly NOD, NTS and REO counts. As you can see, they all have gone through various foreclosure moratoria in one or more foreclosure stages in the past year but since the Obama plan was made known, volume has soared.

Note – the NOD phase is 5-7 months away from foreclosure and the NTS phase 21-45 days away. The REO column will grow significantly in near-term months due to the surge in NTS in March and coming in April.

The counts below are servicer stats and in no way represent the number of loan defaults a insti might be experiencing on balance sheet – I have other charts for that!

For those of you that are curious as to total counts of new loan defaults bearing down on the state, the following is a 2-year chart of new NOD’s. March brought the first 50k+ count ever. From here the banks and servicers will try anything they can to get borrowers into mortgage mods before the Notice-of-Trustee Sale in filed 4-5 months down the road but ultimately most will make it to foreclosure sooner or later.

But this time around the mix has changed. Mid-to-upper end loans — and homes attached to them — are going into the foreclosure process at the greatest rate ever. The following chart shows defaults on loans over $750k. This is trouble because the demand in the segment of the market is outpaced by foreclosure supply alone – where does that leave Ma and Pay Homeowner?

Lastly, the following NTS chart shows properties within 30-days of going to the actual courthouse for foreclosure sale. This massive jump from Feb is likely the beginning of the wave I have been awaiting that will carry foreclosure back to all-time highs within three months.

**For more information in our default/foreclosure related research including real-time mortgage default, foreclosure and loss tracking across large-named publicly traded companies please email me at the address below.Looking ahead of the housing and mortgage market and into bank’s residential mortgage portfolios and balance sheets is now much clearer.